king-fisher-120302075619-phpapp02

7/31/2019 king-fisher-120302075619-phpapp02

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Story Begins


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one of Indias leading privatecarriers went off on the night

of February 17 when word

spread like wildfire that

something was amiss at

Kingfishers Kolkata station.


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By the evening ofFebruary 18,the problem had become

serious enough for the airline to

issue a statement. But it was

too late.


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But what led to thelatest edition of the

trouble that has

plagued Kingfisher?


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Kingfisher has notched up adebt of over Rs7,000 crore. Just

recently, the airline reported a

loss of `444 crore


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But how did things come tosuch a pass for Kingfisher, that

always had the image of apremium airline where the

hospitality was king-size.


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Expert views..

Kingfisher got their strategy wrong. Kingfisher lost

out since it thought it could capture the market by

offering frills, - A prominent aviation analyst told CNN oncondition of anonymity.

For Kingfisher, it was a mish-mash of business

models. Theirs was a flamboyance-based aviation

model. Then they acquired a low-cost carrier like

Air Deccan but did not leverage it, - A prominentAnalyst


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Expert views..Contd..

There are deeper systemic flaws affecting all

carriers which too are responsible. - Mr. JitenderBhargava(Former executive director of national carrier, Air India)

The main problem is that global oil prices have

been shooting up. The airlines do not increasefares proportionally due to intense competition

among themselves. The result is more losses. - CivilAviation Ministry


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Kingfisher view..

The airline industry in India is going through a tough

period due to high costs and lower yields. This is

evident from the unprecedented losses recently

reported. Kingfisher has not made any bailout request

to the Government. We have only asked our banks for

an increase in limits due to significant increase in

operating costs caused by increase in fuel prices and

rupee devaluation,- the airline had stated last year.


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But just who will the market forces

make the biggest beneficiary ifKingfisher shuts shop??

Low-cost carrier IndiGo which ismaking profits is now viewed as the

most successful airline with a sound

business model.


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Now it's time to do what

managers usually do ;)


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Analysis 1

Indigo 31 destination in india Focused & Profit Making

routes

Low price compared to

kingfisher red Low Terminal cost like D1 in

new Delhi and 1B in Mumbai

Focus on Low Cost Airlines

Less Turn around time as

compared to Kingfisher red.

Kingfisher Red 63 domestic destination in

india

Many Unprofitable routes

like Nasik, Hubli etc

Grounding of 14 aircraft Operation shifted to New

Terminal in Delhi & Mumbai

Focus diverted from high

services to low cost

More Turn around time ascompared to Indigo


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Destination Map

To get more details about route map, You can visit

Indigo - http://book.goindigo.in/skylights/cgi-bin/skylights.cgi?module=C3&page=ROUTEMAP

Kingfisher - http://it.aviate-res.com/kingfisher-airlines/route-map.aspx
http://book.goindigo.in/skylights/cgi-bin/skylights.cgi?module=C3&page=ROUTEMAPhttp://book.goindigo.in/skylights/cgi-bin/skylights.cgi?module=C3&page=ROUTEMAPhttp://book.goindigo.in/skylights/cgi-bin/skylights.cgi?module=C3&page=ROUTEMAPhttp://book.goindigo.in/skylights/cgi-bin/skylights.cgi?module=C3&page=ROUTEMAP


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Analysis 2

IndigoStandardized Aircraft Less Inventory Spares

Less Training Cost

Less Maintenance Cost

Less Operational Cost Effective Terminal Use

Easy Scheduling

Kingfisher RedDiversified Aircraft with

different capacities High Inventory Spares

High Training Cost

High Maintenance Cost

High Operation Cost

Scheduling difficult

More Human Resources

required.


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what is the roadforward for Kingfisher

or is it pretty much the

end of the road?


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In a recent media interview, Dr Mallya had indicated

that there were three investors ready to pick up stake

in the airline but added that they were waiting for

Government announcements on FDI to become policy.

The government is now set to approve a 49 percent

FDI limit for foreign airlines in Indian carriers.

FDI / EQUITY


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Expert View..

A total and urgent overhaul is needed. Only infusionof more funds can ensure the revival. There has to be

a sound and well-thought out business model as the

airline cannot afford to go wrong again. Costs have

also to be scaled down. There are too many things tobe done.Mr Bhargava


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My View..

Route Rationalization: Cutting back unprofitablesectors and services to several cities

Debt recast: Asking bank to reduce rates or take a cut

on loans or find a "local investor

FDI: If the FDI limit is raised and foreign airlines are

allowed to buy a stake. Mallya could recapitalize

kingfisher.


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The End

Can He Ride This Out?


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Thank You !!

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